1. QoL Value+ Protector Death Benefit Focused IUL
QoL Value+ Protector is our death benefit focused indexed universal life policy.
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2. Top Key Messages
An attractive bridge product between GUL and Cash Accumulation IUL
Helps provide security of a guaranteed death benefit like traditional GUL products
Flexibility and attractive cash accumulation that is found in Indexed Universal Life products
Competitive, death benefit focused IUL with built-in living benefits!
Competitive price for protection focused IUL with guaranteed protection available up to age 100.
Living Benefit Enhancements – chronic illness rider with no permanency requirement and attractive maximum cap, plus longevity rider for supplemental income1.
Two innovative options to access cash value without impacting death benefit.1, 2
Three index crediting strategies available including our new proprietary volatility control index – ML Strategic Balanced Index®.3
Account value enhancement beginning in year 6.
Option to select a guaranteed income stream for beneficiaries that is designed to grow at a fixed interest rate.
1. Under current federal tax law, partial withdrawals are reportable to the policy owner, and may be taxable.
2. Limitations apply.
3. IUL is not a direct investment in the stock market. Provides the potential for interest to be credited based in part on the performance of a specified index.
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3. QoL Value+ Protector Features
QoL Accelerated Benefit Riders – Built in chronic, critical, and terminal illness protection.
Two innovative options to access cash value without impacting death benefit.1, 2
Three index crediting strategies available including our new proprietary volatility control index – ML Strategic Balanced Index®.3
GUARANTEED account value enhancement beginning in year 6.
Competitive price for protection focused IUL with guaranteed protection available up to age 100.
Living Benefit Enhancements – chronic illness rider with no permanency requirement and attractive maximum cap, plus longevity rider for supplemental income1.
Two innovative options to access cash value without impacting death benefit.1, 2
Three index crediting strategies available including our new proprietary volatility control index – ML Strategic Balanced Index®.3
Account value enhancement beginning in year 6.
Option to select a guaranteed income stream for beneficiaries that is designed to grow at a fixed interest rate.
Guarantees are backed by the claims-paying ability of the issuing insurance company.
1. Under current federal tax law, partial withdrawals are reportable to the policy owner, and may be taxable.
2. Limitations apply.
3. IUL is not a direct investment in the stock market. Provides the potential for interest to be credited based in part on the performance of a specified index.
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4. QoL Value+ Protector Features
Accelerated Access Solution Rider – Additional Chronic illness rider with no permanency requirements & higher maximum limits.1
Lifestyle Income Solution Rider – Longevity rider for supplemental income.1
Select Income Rider – Option to select a guaranteed income stream for beneficiaries that is designed to grow at a fixed interest rate.
Competitive price for protection focused IUL with guaranteed protection available up to age 100.
Living Benefit Enhancements – chronic illness rider with no permanency requirement and attractive maximum cap, plus longevity rider for supplemental income1.
Two innovative options to access cash value without impacting death benefit.1, 2
Three index crediting strategies available including our new proprietary volatility control index – ML Strategic Balanced Index®.3
Account value enhancement beginning in year 6.
Option to select a guaranteed income stream for beneficiaries that is designed to grow at a fixed interest rate.
Guarantees are backed by the claims-paying ability of the issuing insurance company.
Under current federal tax law, partial withdrawals are reportable to the policy owner, and may be taxable.
Limitations Apply
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5. VALUE – Offering you affordable prices and extended guarantee periods
Competitively priced within the IUL insurance industry.
Competitive rates on level pays that carry to 105.
Competitive single pays with optional Premium Protection rider.
Can potentially reduce required premiums with Select Income Rider.1
Competitively priced within the IUL insurance industry.
Competitive rates on level pays that carry to 105.
Competitive single pays with optional Protected Premium rider.
Can potentially reduce required premiums with Select Income Rider.1
1 The rider must be selected at the time of policy purchase. There is no additional fee for this rider. A portion of the installment payments under this rider may be taxable.
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6. ACCESS TO CASH - Help to increase protection and access funds
The QoL Value+ Protector offers attractive provisions for accessing excess cash value in the policy without reducing initial death benefit and in some cases increasing the death benefit.
Strong Index Performance Feature
Excess Funding Feature
Premium Protection Rider
Other options include living benefits that accelerate the death benefit, thus helping to protect other family assets from being depleted to support a chronic illness or longevity.
QoL Accelerated Benefit Riders
Accelerated Access Solution®
Lifestyle Income Solution®
The QoL Value+ Protector offers innovative provisions for accessing excess cash value in the policy without reducing initial death benefit and in some cases increasing the death benefit.
Other options include living benefits that accelerate the death benefit, thus helping to protect other family assets from being depleted to support a chronic illness or longevity.
Strong Index Performance Feature
Excess Funding Feature
Accelerated Access Solution
Lifestyle Income Solution
Select Income Rider
Premium Protection Rider
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7. Key Terminology
BENCHMARK PREMIUM: The Benchmark Premium is a level annual premium which is used to determine the Excess Funding option. BENCHMARK CASH VALUE: The Minimum Benchmark Cash Value is calculated using a tracking account that applies the same premium and current charges as the policyholder account value with the exception that interest will be credited on the tracking account at a fixed rate. (5.50%)
The total cash withdrawal benefit for all combined options will be limited to the lesser of $100,000 and 10% of the Specified Amount whichever is lower.
Exercising the ABRs, Chronic Illness or Terminal Illness will result in forfeiting the liquidity options. All other riders do not effect the liquidity options.
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8. Excess Funding Feature
If you pay extra premium into your policy to achieve additional tax advantaged growth, this innovative liquidity option can be used to withdraw excess premiums in policy year 20 with no decrease in the initial death benefit,1 if there is available cash surrender value in the policy.2, 3
If you pay extra premium into your policy to achieve additional tax advantaged growth, you can use this innovative liquidity option to withdraw excess premiums in policy year 20 with no decrease in the initial death benefit, if there is available cash surrender value in the policy.
1. Option election dates are at the end of the 20th policy for issue ages 0-64 or the later of age 85 or the end of the 5th policy year for issue ages
2. Under current federal tax law, partial withdrawals are reportable to the policy owner, and may be taxable.
3. Limitations apply.
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9. Excess Funding Feature
Assume a policyowner funds the policy at $500 above the Benchmark Premium of $3,489 for 20 years, then they withdraw the additional funds in year 20 and pay only Benchmark Premium in future years: The policy earns a 6.05% hypothetical crediting rate:
Annual Premium
Cumulative Premiums End of Policy Year 20
Benchmark Premium
$3,489
$69,780
Hypothetical Premium – Additional $500/Year for 20 years
$3,989
$79,780
Funding Access Available
$10,000
Review example.
Male 45 Preferred Non-Tobacco $500,000 DB
6.05% Illustrated Rate
Hypothetical representation for illustrative purposes only.
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10. Only Benchmark Premium With Additional Funding After Withdrawal
Excess Funding Feature
What happens if the Policyowner exercises the Cash Access from Excess Funding Feature?
Only Benchmark Premium
With Additional Funding After Withdrawal
Death Benefit
$500,000
Cash Value Year 20
$63,316
$68,852
At 6.05% Hypothetical Crediting Rate
Premiums at Years 21+
$3,489
Policy Guarantees Death Benefit To
Age 85
Age 91
Policy Stays Inforce To
Age 121
Cash Value at Age 100
$408,263
$605,173
Review example.
Cash value figures calculated at a non-guaranteed hypothetical rate of 6.05%, assuming premium of $3,489 is paid in all years and current policy charges are assessed.
Premium of $3,489 is calculated by solving for the benchmark premium on a $500k DB, male, age 45, Preferred non-tobacco rate class.
Hypothetical representation for illustrative purposes only.
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11. Illustrating Benchmark Premium (Excess Funding)
The Value+ Protector offers innovative provisions for accessing excess cash value in the policy without reducing initial death benefit and in some cases increasing the death benefit.
Other options include living benefits that accelerate the death benefit, thus protecting other family assets from being depleted to support a chronic illness or longevity.
Strong Index Performance Feature
Excess Funding Feature
Accelerated Access Solution
Lifestyle Income Solution
Select Income Rider
Premium Protection Rider
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12. Cash Access Exercised—Impact on Policy Values
Read slide
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13. Strong Index Performance Feature
If values in the policy exceed benchmark assumptions due to strong index performance, this differentiated liquidity option allows you to withdraw the excess cash value, either in policy year 20 or at age 85 – with no decrease in the initial death benefit or length of death benefit guarantee.1 The cash can be used as desired, or to buy additional paid-up life insurance without further underwriting.2
If values in the policy exceed benchmark assumptions due to strong index performance, this differientatied liquidity option allows you to withdraw the excess cash value, either in policy year 20 or at age 85 – with no decrease in the initial death benefit or length of death benefit guarantee. The cash can be used as desired, or to buy additional paid-up life insurance without further underwriting.
Option election dates are at the end of the 20th policy year (for issue ages 0-64) and the later of age 85 or the end of the 5th policy year (for all issue ages).
Under current federal tax law, partial withdrawals are reportable to the policy owner and may be taxable. Limitations apply.
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14. Hypothetical representation for illustrative purposes only.
Strong Index Performance Feature
Male 45 PNT, $500,000 DB Assume the policyowner pays a premium which will guarantee the policy to age 92: Benchmark Cash Value rate = 5.50%. If the policy actually earned 6% the results would be as follows:
End of Year 20
At Age 85
Benchmark Cash Value
$77,048
$304,108
Cash Surrender Value
$81,066
$344,694
End of Year 20
At Age 85
Cash Access from Strong Index Performance Available:
$4,018
$40,586
Additional Paid-Up Life Insurance Available
$7,879
$51,260
Review example.
Guaranteed to age 93
Min Paid Up Amount $5,000
Max Paid Up Amount $250,000
$500,000 DB M 45 PNT
Strong Performance must be used 1st.
Paid Up Life Insurance Option Only Available for Standard or Better
Hypothetical representation for illustrative purposes only.
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15. Illustrating Strong Index Performance
Walk through example
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16. Cash Access Exercised—Impact on Policy Values
Walk through example
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17. Cash Access Features
Both cash access options can be utilized at the same time
I.E.—At the end of policy year 20, you may access the Excess Funding & Strong Index Performance features at the same time
The total amount that can be accessed by either of the options is $100,000
Walk through example
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18. Premium Protection Rider
The Premium Protection Rider can be selected for those policies that will be funded early, for example through a single-pay premium or the transfer of a policy from another company.
With this rider, you may withdraw funds above the target premium in years 2 through 5 with no surrender charge penalties, to the extent that accumulation value is available.1 the funds are not locked in.
Protected Premium rider is elected at the time of policy purchase for an additional charge.
The Protected Premium rider can be selected for those policies that will be funded early, for example through a single-pay premium or the transfer of a policy from another company.
With this rider, you may withdraw funds above the target premium in years 2 through 5 with no surrender charge penalties, to the extent that accumulation value is available.1 the funds are not locked in.
Protected Premium rider is elected at the time of policy purchase for an additional charge.
Premium expense charge of 2%.
1. The target premium is a level annual premium which is intended to carry the policy to or close to maturity on a current (non-guaranteed) assumption basis assuming 1) a 6% illustrated rate and 2) that premiums have been paid on time at the beginning of each policy year.
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19. Hypothetical representation for illustrative purposes only.
Premium Protection Rider
Read Slide
Hypothetical representation for illustrative purposes only.
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20. Accelerated Access Solution (AAS)
Additional Chronic Illness Coverage
Read slide
Policies issued by American General Life Insurance Company (AGL)
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21. Accelerated Access Solution Details
Additional paid Chronic Illness benefit available on permanent QoL products
Accelerate 100% of death benefit, up to $3 million, in the event of qualifying chronic illness
Dollar-for-dollar acceleration; you always knows the benefit amount
Maximum underwriting class: Table D
Minimum monthly benefit payout: $1,000
Benefit payout may be elected to be lump sum or monthly payout
Read through slide
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22. Accelerated Access Solution
101(g)
No LTC license necessary
2-out-of-6 ADLs; or Severe Cognitive Impairment
No Permanency Requirement*
Indemnity Benefit
No Receipts
Spend benefits on anything
Flexible Benefit Base
Benefit = 50% up to 100% of Death Benefit
$50,000 minimum up to $3,000,000 maximum
Full waiver of monthly deductions
Let’s look at some of the benefits of the Accelerated Access Solution.
Accelerated Access was filed as a rider under IRC section 101(g). That primarily means that:
No LTC license is required for you to be able to sell the Accelerated Access Solution as part of an AG Secure Lifetime GUL II policy. Your Life Insurance and Accident & Health licensing is all that’s necessary from a licensing standpoint.
It also means that the primary triggers for Chronic Illness benefits are either (1) inability to perform 2-out-of-6 Activities of Daily Living (ADL’s); or (2) severe cognitive impairment.
The benefit was filed as an Indemnity benefit. That’s completely different than the alternative – the Reimbursement benefit. With Reimbursement, you must file a claim and provide copies of all invoices. Your claim is reviewed and, eventually, you receive a reimbursement in an amount the insurance company deems appropriate based on your receipts. With American General Life’s Indemnity version, you don’t need to provide an receipts or file any claims regarding your treatments. American General Life will send your benefit checks every month, regardless of whether you’ve incurred any costs at all, and regardless of what those costs were. You meet the criteria for ADLs or severe cognitive impairment, file your claim and satisfy the 90-day waiting period, and American General Life begins sending the checks.
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23. Accelerated Access Solution
Flexible Monthly Benefit
IRS Per Diem capped at 2% per month
IRS Per Diem capped at 4% per month
IRS Per Diem with No Cap!
Max. Monthly Benefit = Total Benefit ÷ 12
Monthly benefit: American General Life will always pay up to the maximum IRS monthly Per Diem benefit, but you have a choice of three different caps on the maximum monthly benefit American General Life will pay.
2% of the AAS Benefit Base. With this option, if you had an Accelerated Access Solution aggregate benefit of $500,000, your monthly maximum benefit would be the lesser of: (a) the IRS monthly Per Diem; or (b) $10,000 per month.
4% of the AAS Benefit Base. With this option, if you had an Accelerated Access Solution aggregate benefit of $500,000, your monthly maximum benefit would be the lesser of: (a) the IRS monthly Per Diem; or (b) $20,000 per month.
If you don’t choose to cap your monthly benefit at 2% or 4%, and assuming the same aggregate $500,000 Accelerated Access Solution benefit, the maximum monthly benefit will be the lesser of: (a) the IRS monthly Per Diem; or (b) $500,000 divided by 12 months = $41,666 per month.
So, choose your aggregate benefit, and your monthly cap, and you’ll be ready to go!
IRS caps the maximum daily rate each year. The 2017 maximum is $360/day or $10,950 month. Subsequent years may be higher.
* Maximum monthly benefits limited to IRS per diem in effect at time of claim
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24. Accelerated Access Solution
Inflation hedge against future costs
Purchase more than today’s Per Diem limit
Many products won’t allow it
Provides inflation protection with a maximum monthly benefit cap
4% Cap – example:
4% of $300,000 = $12,000 per month
Go on-claim in 2017: Collect $10,950 per month
Go on-claim in the future when Per Diem = $15,000 per month: Collect $12,000 per month
Per Diem – example:
$300,000 AAS benefit
Maximum monthly benefit: $300,000 = $15,000 per month
For clarification, here are a few more examples.
With Accelerated Access Solution you can actually purchase more than today’s Per Diem limit.
There are products on the market that won’t let you purchase a benefit in excess of the current year’s Per Diem limit, which means your benefit will never go up, regardless of an increasing, inflation adjusted Per Diem.
Because AIG allows you to purchase an aggregate amount and a monthly benefit amount in excess of the current Per Diem, the outcome is very simple. At lower Per Diem amounts you get less per month, but for more months. At higher Per Diem amounts you get more per month, but for fewer months.
Let’s look at another example using a 4% cap. If you purchased a $300,000 Accelerated Access Solution benefit, your maximum monthly benefit would be $12,000. Accelerating $12,000 per month would be able to continue for 25 months ($300,000 ÷ 12 = $25)
If you went on-claim in 2017 you’ wouldn’t receive the entire $12,000 per month. The IRS Per Diem would limit you to $10,950 per month, which would last for 30 months.
And, if you went on claim when the IRS Per Diem was $15,000, American General would limit your monthly benefit to your capped amount of $12,000 per month.
Lastly, if you did not choose a 2% or 4% cap, then your maximum monthly benefit is your total benefit divided by 12. In this example, $300,000 ÷ 12 = $25,000 per month.
Naturally, if the Per Diem amount is less than $25,000 per month, you’ll receive the Per Diem in effect when you began your claim.
* Maximum monthly benefits limited to IRS per diem in effect at time of claim
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25. Lifestyle Income Solution
For an additional fee, you can select the Lifestyle Income Solution rider, which allows you to accelerate the death benefit
Lifestyle Income Solution: Longevity Rider
Accelerate up to 10% of DB per year
Primary requirement: Live to age 85
Tax-free up to basis; ordinary income after
The Lifestyle Income Solution: provides a type of longevity insurance. With this rider you have the ability to accelerate up to 10% of your death benefit per year. The primary requirements is that you live to age 85. It is a tax free return of the cost basis “100% ROP” and the rest is taxed as ordinary income.
Max table rating of D.
This rider was revamped such that when combined with the Accelerated Access Solution Rider, the resulting premium cannot be less than either rider on its own.
This rider was revamped such that when combined with the AAS rider, the resulting premium cannot be less than either rider on its own.
Choosing to exercise rights under the Lifestyle Income Solution can impact cash available under the Accelerated Access Solution.
Please speak with your American General Life Insurance Company representative for more information.
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26. Lifestyle Income Solution
Review example
LIS now has a level 10 year payout.
Hypothetical representation for illustrative purposes only.
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27. Flexible income for family or business if you dies too soon.
The tax-free death benefit can help ensure that your family or business lives on with a lump-sum benefit payment.
Another option you can choose for your beneficiaries is the optional
Select Income rider.
Another option you can choose for your beneficiaries is the optional Select Income rider.
Riders are not available in all states.
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28. Select Income Rider No cost rider
Potentially decreases policy’s required premiums
Helps beneficiaries manage ongoing expenses
Optional rider converts a portion or all of the life insurance benefit for beneficiaries to a predefined guaranteed set of annual payments
Minimum percentage of life insurance benefit available to convert is 10% (up to 100%)
You can choose payment durations to beneficiaries of 10, 20, and 30 years
No cost rider
Potentially decreases policy’s required premiums
Helps beneficiaries manage ongoing expenses
Optional rider converts a portion or all of the life insurance benefit for beneficiaries to a predefined guaranteed set of annual payments
Minimum percentage of life insurance benefit available to convert is 10% (up to 100%)
Riders are not available in all states.
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29. Select Income Rider Only available at issue
Once selected at issue, the installment payment period is irrevocable for the beneficiary
May lower the policy’s cost of insurance charges, which may enable the premium amount to be lower
Premium amounts may decrease by 8-10% on average compared to what it would be without the rider
Only available at issue
Once selected at issue, the installment payment period is irrevocable for the beneficiary
May lower the policy’s cost of insurance charges, which may enable the premium amount to be lower
Premium amounts may decrease by 8-10% on average compared to what it would be without the rider
Riders are not available in all states.
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30. Select Income Rider Payout Example
Death Benefit $1,000,000
Payout
$100,000
$101,010
$102,030
$103,061
$104,102
Period 1 2 3 4 5
$105,153
$106,215
$107,288
$108,371
$109,466 6 7 8 9 10
Total Death Benefit
$1,046,696
Review Example
Minimum Installment Amount: $10,000
Minimum Initial Installment Payment: $500
Hypothetical representation for illustrative purposes only.
Riders are not available in all states.
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31. Select Income Rider Effect on Premium
11.5% Decrease
Female 40 SNT
Without Select Income Rider
With Select Income Rider
Initial life insurance benefit
$250,000
Premium to carry to age 105
$1,429
$1,264
9% Decrease
Male 60 SNT
Without Select Income Rider
With Select Income Rider
Initial life insurance benefit
$500,000
Premium to carry to age 105
$9,407
$8,565
Review Example
Hypothetical representation for illustrative purposes only.
Riders are not available in all states.
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32. 1 Policy loans and withdrawals may be taxable.
Take income for any purpose Use the policy’s loan and withdrawal features any time to access cash for any purpose
Standard Loan
3% Charge / 2% Credit
Preferred Loan
2% Charge / 2% Credit
Available after policy year 10 but are restricted to a policy year maximum of 10%
Participating Loans
5% rate at product launch
Loan rate will vary between 4% and 8% declared monthly
Loan rate is governed by The Model Policy Loan Interest Rate Bill (MDL-590)
Switch Loan Type up to 3 times during the life of the policy
Review loan rates.
1 Policy loans and withdrawals may be taxable.
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33. Rate Summary Blend Participation Rate 0.00% NA 100% 6.05% 0.75%
Rates Current as of 10/02/2017
Index Strategy
Guaranteed Minimum Interest
Cap Rate
Participation Rate
Non-Guaranteed Crediting Rate AG 49
Guaranteed Account Value Enhancement (policy yrs 6+)
Blend Participation Rate
0.00% NA
100%
6.05%
0.75%
Utilizing MLSB Index
60%
Utilizing S&P 500
10.00%
Declared Interest
2.00%
2.90%
Read Slide
Hypothetical representation for illustrative purposes only.
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34. ML Strategic Balanced Index® Dynamically Blending Equity and Fixed Income Indices to Provide Stability with Upside Growth Potential
What You Should Know About the S&P 500 and ML Strategic Balanced Index
The S&P 500® Index includes 500 of the largest companies in the U.S. market. It is widely regarded as the standard for measuring U.S. stock market performance. The Merrill Lynch 10-Year Treasury Futures (Total Return) Index tracks the performance of a portfolio of near maturity 10-year U.S. Treasury futures contracts. It is representative of the fixed income market.
The ML Strategic Balanced Index is a hybrid index that diversifies across multiple asset classes. It seeks growth and volatility control by dynamically allocating to equity, fixed income and cash. Account options that use the ML Strategic Balanced Index may benefit from a higher, more consistent level of earned interest.
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35. Rules-Based Indexing A dynamic two-step allocation process
The ML Strategic Balanced Index® employs quantitative rules based on market volatility to adjust exposures between the S&P 500® Index (without dividends) and the Merrill Lynch 10-Year Treasury Futures (Total Return) Index. This rules-based process helps to eliminate the negative impact that emotions may have on allocation decisions, making the process objective and transparent.
Equity and fixed income allocations are rebalanced semiannually based on the historical volatility of the underlying indices. Volatility is also monitored on a daily basis, and allocations may be shifted to cash when short-term volatility rises above 6%. The Index seeks to maintain volatility at this level to help balance risk and return.
1. Volatility Control measures seek to provide smoother results and mitigate sharp market fluctuations. While this type of strategy can lessen the impact of market downturns, it is important to note that it will also lessen the impact of market upturns, therefore limiting upside potential.
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36. The Value of a Dynamic Rules-Based Approach Stable performance over the past 20 years
Read directly from slide
Note: Past performance is not a guarantee of future results. The ML Strategic Balanced Index® was created on August 12, Levels for the Index before August 12, 2014 represent hypothetical data determined by retroactive application of a back-tested model, itself designed with the benefit of hindsight. The above hypothetical chart only reflects the performance of the ML Strategic Balanced Index.® It does not reflect the amount of interest credited to an index annuity or index life product during this time. Actual results for a specific insurance contract would depend on the crediting strategy chosen and the spread or participation rate for the time period(s) shown.
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37. QoL Value+ Protector Features designed for more stability to help meet death benefit protection needs
Guaranteed Account Value Enhancement of 0.75% from year 6
Guarantees to life expectancy or longer
Volatility Control Index that provides stable returns
Read slides.
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38. Product Specifications
Product Highlights
Issue Age
0 - 85
Minimum Death Benefit
$50,000
Surrender Charge Period
14 years
Monthly Admin Fee
$10.00 (current)
$10.00 (maximum)
Premium Load
Years 1-5 = 12%,
Years 6-10 = 7.5%
Years 11+ = 5%
Max is 12%
Expense Charge
Monthly Per $1,000 Expense Charge for first 5 years only, including increases
Read Slide
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39. Standard Non Tobacco Includes Table B!
Product Specs
Product Highlights
Underwriting Classifications
Preferred Plus Non Tobacco
Preferred Non Tobacco
Standard Non Tobacco
Preferred Tobacco
Standard Tobacco
Special (Substandard) Non Tobacco
Special (Substandard)Tobacco
Death Benefit Option
Option 1 (Level Death Benefit)
Option 2 (Increasing Death Benefit)
Read Slide
Issue ages are calculated by age nearest birthday.
Free look provision is 10 days.
We have improved our standard non tobacco rates and removed the Standard Plus Non-tobacco classification!
Standard Non Tobacco Includes Table B!
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40. Questions
Read Slide
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41. Important Information
Policies issued by: American General Life Insurance Company (AGL),. Policy Form Numbers 16760, ICC , ; Rider Form Numbers ICC , 15603,ICC , 15602, ICC , 15604, ICC , 15600, 82012, CA, 82410, 88390, ICC , , 07620, ICC , ICC ,ICC , ICC , ICC , ICC , (AGLA 04CHIR-CA (0514), AGLA 04TIR, AGLA 04CRIR, ).Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). AGL does not solicit business in the state of New York. Products may not be available in all states and product features may vary by state. Guarantees are backed by the claims-paying ability of the issuing insurance company. These product specifications are not intended to be all-inclusive of product information. State variations may apply. Please refer to the policy for complete details.
This information is general in nature and may be subject to change. The Company, its financial professionals and other representatives are not authorized to give legal, tax or accounting advice. Applicable laws and regulations are complex and subject to change. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties. For advice concerning your situation, consult your professional attorney, tax advisor or accountant. ©2017 AIG. All rights reserved. AGLC111217
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42. Index Disclosure for the S&P 500
The S&P 500 (the “Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by American General Life Insurance Company (AGL). Standard & Poor’s®, S&P®, and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”). The trademarks have been licensed to SPDJI and have been sublicensed for use for certain purposes by AGL.
The life insurance products underwritten and issued by AGL are not sponsored, endorsed, sold or promoted by SPDJI, S&P, or any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices does not make any representation or warranty, express or implied, to the owners of AGL’s or any member of the public regarding the advisability of investing in securities generally or in AGL’s products particularly or the ability of the Index to track general market performance. S&P Dow Jones Indices’ only relationship to AGL with respect to the Index is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The Index is determined, composed and calculated by S&P Dow Jones Indices without regard to AGL or its products. S&P Dow Jones Indices has no obligation to take the needs of AGL or the owners of its products into consideration in determining, composing or calculating the Index. S&P Dow Jones Indices is not responsible for and has not participated in the determination of the prices, and amount of AGL’s products or the timing of the issuance or sale of AGL’s products or in the determination or calculation of the equation by which AGL’s products are to be converted into cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of AGL’s products. There is no assurance that investment products based on the Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.
S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE Index OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY AGL, OWNERS OF AGL’S PRODUCTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE Index OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND AGL, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES LLC.
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43. California Resident Supplemental Information
Disclosures Applicable to:
• Critical Illness Accelerated Death Benefit Rider • Chronic Illness Accelerated Death Benefit Rider • Terminal Illness Accelerated Death Benefit Rider (1) When filing a claim for Qualifying Critical Illness under a Critical Illness Accelerated Death Benefit Rider, for Qualifying Chronic Illness under a Chronic Illness Accelerated Death Benefit Rider or for Qualifying Terminal Illness under a Terminal Illness Accelerated Death Benefit Rider, the claimant must provide to the Company a completed claim form and then-current Certification which must be received at its Administrative Center. (2) If a benefit under the Critical Illness Accelerated Death Benefit Rider is payable, the Company will provide the Owner with one (1) opportunity to elect a Critical Illness Accelerated Benefit Amount as to the occurrence of the Qualifying Critical Illness in question. To make such an election, the Owner must complete an election form and return it to AGL within the Election Period set forth in the rider (i.e., within 60 days of the owner’s receipt of the election form). The Company will not provide a later opportunity to elect a Critical Illness Accelerated Benefit Amount under a Policy as to the same occurrence of a Qualifying Critical Illness . (3) If a benefit under the Chronic Illness Accelerated Death Benefit Rider or under the Terminal Illness Accelerated Death Benefit Rider is payable, the Company will provide the Owner with an opportunity to elect a Chronic Illness Accelerated Benefit Amount as to the Qualifying Chronic Illness in question or to elect a Terminal Illness Accelerated Death Benefit Amount as to the Qualifying Terminal Illness in question, as applicable. To make an election, the Owner must complete an election form and return it to AGL within 60 days of the Owner’s receipt of the election form. (4) Under certain circumstances where an insured’s mortality (i.e., our expectation of the insured’s life expectancy) is not significantly changed by a Qualifying Critical Illness or a Qualifying Chronic Illness and, notwithstanding the Minimum Accelerated Benefit Amount provision, the accelerated benefit may be zero. (5) See your policy for applicable requirements concerning claim and election forms for accelerated death benefits. (6) Benefits payable under an accelerated death benefit rider may be taxable. Neither American General Life Insurance Company nor any agent representing it is authorized to give legal or tax advice. Please consult a qualified legal or tax advisor regarding questions concerning the information and concepts contained in this material. (7) Generally, we will send you an IRS Form 1099-LTC if you receive an accelerated death benefit on account of a Chronic Illness or a Terminal Illness. We will send you an IRS Form 1099-R if you receive an accelerated death benefit on account of a Critical Illness. The sum that will be included in Box 2 (Accelerated death benefits paid) of IRS Form 1099-LTC or in Box 1 (Gross distribution) of IRS Form 1099-R will be the actual sum you received by check or otherwise minus any refund of premium and/or loan interest included with our benefit payment plus any unpaid but due policy premium, if applicable, and/or pro rata amount of any loan balance. (8) The maximum amount of life insurance death benefits that may be accelerated as to an Insured Person under all accelerated benefit riders is the lesser of the existing amount of such death benefits or a lifetime maximum of $2,000,000. (9) See your policy for details.
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44. California Resident Supplemental Information
The Accelerated Access Solution (AAS) is an optional living benefit rider that is available on the insurance policy issued by American General Life Insurance Company in the state of California. The Accelerated Access Solution is a life insurance rider that accelerates a portion of a policy’s death benefit when an insured meets the health impairment criteria set forth in the rider.1 Control over how money is spent is up to the policy holder; there are no receipts required and no restrictions on what the money is used for once the policy owner has been certified as eligible to receive AAS benefits. Benefits are paid directly to the policyholder for as long as the criteria are met, or until the AAS benefit amount is exhausted, whichever occurs first. Acceleration of death benefits and payments under such an accelerated death benefit will reduce the death benefit of the policy and reduce other policy values as well, potentially to zero. If the entirety of the insurance amount is accelerated, the policy terminates.
Payout Options
Multiple benefit payment options are available with two options for monthly disbursement at the time of purchase: • 2% of AAS benefit, or the applicable maximum monthly amount if less • 4% of AAS benefit, or the applicable maximum monthly amount if less The maximum monthly amount is $10,000 increased annually by 4% until the time of claim. • Alternatively, you have the option at the time of claim to receive the accelerated benefit in a lump sum payment in lieu of the benefits payable under the monthly payment option you selected. Such lump sum benefit will be subject to an actuarial discount that is determined by the company at the time you become eligible for benefits under the rider.2
Benefit Payment
Once the insured meets the health impairment criteria and benefits have been approved for payment, they may select their disbursement. There is a maximum benefit payable under the monthly disbursement option that we’ll notify the insured of at their time of claim. The insured may also select a smaller amount than the maximum monthly benefit. A lump sum option is available as well; which can be substituted for monthly benefits.
Tax Implications
There are no restrictions or limitations on the use of the accelerated death benefit proceeds under the Chronic Illness Accelerated Death Benefit Rider. The accelerated benefits payable under this rider are generally intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code. There may be tax consequences in some situation in accepting an accelerated benefit payment amount, such as where payments exceed the per diem limitation under the Internal Revenue Code. You should consult your personal tax advisor to assess the impact of this Benefit prior to accepting the Benefit.
1 Insured must be certified as chronically ill by a Licensed Health Care Practitioner and meet all eligibility requirements and the condition need not be permanent.
2 The Company will determine the actuarial discount applicable to a given lump sum payment using factors including, but not limited to the Company’s assessment of the expected future mortality of the Insured and an interest rate determined as described in the rider.
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45. California Resident Supplemental Information
NOT Long-Term Care Insurance
This is a life insurance benefit that also gives you the option to accelerate some or all of the death benefit in the event that you meet the criteria for a qualifying event described in the policy. This policy or certificate does not provide long-term care insurance subject to California long-term care insurance law. This policy or certificate is not a California Partnership for Long-Term Care program policy. This policy or certificate is not a Medicare supplement policy. An accelerated death benefit such as the Chronic Illness Accelerated Benefit Rider and long-term care insurance provide very different kinds of benefits:
Generally, an accelerated death benefit is a rider to or other provision in a life insurance policy that permits the policy owner to accelerate some or potentially all of the death benefit of a life insurance policy if the insured meets the definition of having a chronic illness as defined in the rider or policy provision. Acceleration of death benefits and payments under such an accelerated death benefit will reduce the death benefit of the policy and reduce other policy values as well, potentially to zero. If the entirety of the insurance amount is accelerated, the policy terminates.
A Long Term Care insurance policy is any insurance policy, certificate, or rider providing coverage for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital. Long-term care insurance includes all products containing any of the following benefit types: coverage for institutional care including care in a nursing home, convalescent facility, extended care facility, custodial care facility, skilled nursing facility, or personal care home; home care coverage including home health care, personal care, homemaker services, hospice, or respite care; or community-based coverage including adult day care, hospice, or respite care. Long-term care insurance includes disability based longterm care policies but does not include insurance designed primarily to provide Medicare supplement or major medical expense coverage.
If you are interested in long-term care, nursing home or home care insurance, you should consult with an insurance agent licensed to sell that insurance, inquire with the insurance company offering the accelerated death benefits, or visit the California Department of Insurance Internet Web site (www. insurance.ca.gov) section regarding long-term care insurance. If you choose to accelerate a portion of your death benefit, doing so will reduce the amount that your beneficiary will receive upon your death. Receipt of accelerated death benefits may affect eligibility for public assistance programs, such as Medi-Cal or Medicaid. Prior to electing to receive the accelerated death benefit, you should consult with the appropriate social services agency concerning how receipt of accelerated death benefits may affect that eligibility. If the policy terminates, the Chronic Illness Accelerated Death Benefit Rider will also terminate. LTC expense reimbursement vs. ADB benefits are paid without receipts. LTC benefits are based on benefit levels and a pool of money selected at the time of purchase, and ADB benefits depend on the life policy value. ADB benefits will reduce the death benefit that the policyholder’s heirs will receive, and the use of the ADB proceeds is unrestricted, whereas LTC benefits will not reduce the death benefit that the policyholder’s heirs will receive and the policyholder must use LTC benefits for LTC services.
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46. Index Disclosure for the ML Strategic Balanced Index
The ML Strategic Balanced IndexSM provides systematic, rules-based access to the blended performance of two underlying indices—the S&P 500 (without dividends), which serves to represent equity performance, and the Merrill Lynch 10-year U.S. Treasury Futures Total Return Index, which serves to represent fixed income performance. To help manage overall return volatility, the Index may also systematically utilize Cash performance in addition to the performance of the two underlying indices.
Important Note: The ML Strategic Balanced Index embeds an annual index cost in the calculations of the change in Index Value over the Index Term. This “embedded index cost” will reduce any change in Index Value over the Index Term that would otherwise have been used in the calculation of index interest, and it funds certain operational and licensing costs for the index. It is not a fee paid by you or received by the Company. The Company’s licensing relationship with Merrill Lynch, Pierce, Fenner & Smith Incorporated for use of the ML Strategic Balanced Index and for use of certain service marks includes the Company’s purchase of financial instruments for purposes of meeting its interest crediting obligations. Some portion of those instruments will, or may be, purchased from Merrill Lynch, Pierce, Fenner & Smith Incorporated or its Affiliates.
Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates (“BofA Merrill Lynch”) indices and related information, the name “BofA Merrill Lynch”, and related trademarks, are intellectual property licensed from BofA Merrill Lynch, and may not be copied, used, or distributed without BofA Merrill Lynch’s prior written approval. The products of licensee American General Life Insurance Company have not been passed on as to their legality or suitability, and are not regulated, issued, endorsed, sold, guaranteed, or promoted by BofA Merrill Lynch. BOFA MERRILL LYNCH MAKES NO WARRANTIES AND BEARS NO LIABILITY WITH RESPECT TO ANY INDEX, ANY RELATED INFORMATION, ITS TRADEMARKS, OR THE PRODUCT(S) (INCLUDING WITHOUT LIMITATION, ITS QUALITY, ACCURACY, SUITABILITY AND/OR COMPLETENESS).
The ML Strategic Balanced Index (the “Index”) is the property of Merrill Lynch, Pierce, Fenner & Smith Incorporated, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Index. The Index is not sponsored by S&P Dow Jones Indices or its affiliates or its third party licensors (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices will not be liable for any errors or omissions in calculating the Index. “Calculated by S&P Dow Jones Indices” and the related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Merrill Lynch, Pierce, Fenner & Smith Incorporated.
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